Skip to content
AidData logo

Overview

Bank of China contributes to RMB 15 billion syndicated rollover loan to shore up Pakistan’s foreign exchange reserves in June 2022

Commitments (Constant USD, 2023)$702,020,157
Commitment Year•2022Country of Activity•PakistanDirect Recipient Country of Incorporation•PakistanSector•General Budget SupportFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 22, 2022
Start (actual)
Jun 24, 2022
First repayment (originally scheduled)
Jun 21, 2025
Last repayment (originally scheduled)
Jun 21, 2025

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Cofinancing agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Government Agencies

  • State Bank of Pakistan (SBP)

Implementing agencies

Government Agencies

  • State Bank of Pakistan (SBP)

Loan description

BoC, ICBC, and CDB contributions to RMB 15 billion syndicated rollover loan to shore up Pakistan’s foreign exchange reserves in 2022

Grace period•3 yearsGrant element•15.6031%Interest rate (t₀)•3.637%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•3 years

Narrative

Full Description

Project narrative

On March 19, 2019, China Development Bank (CDB), Bank of China (BoC), and the Industrial and Commercial Bank of China (ICBC) signed an RMB 15 billion ($2.1837 billion) facility (loan) agreement with the State Bank of Pakistan (SBP) to shore up the country’s foreign exchange reserves. The estimated contributions from CDB, ICBC, and BoC are captured via Record ID#57695, Record ID#98785, and Record ID#98786, respectively. The loan carried the following borrowing terms: a 3-year maturity (final maturity date: March 25, 2022) and an interest rate of 6-month SHIBOR plus a 2.5% margin. The loan fully disbursed, and when it reached maturity in March 2022, it was fully repaid. Then, on June 22, 2022, CDB, BoC, and ICBC and the State Bank of Pakistan signed an RMB 15 billion ($2,240,310,000) syndicated rollover facility (loan) agreement to shore up the country’s foreign exchange reserves. The estimated contributions from CDB, BoC, and ICBC are captured via Record ID#96215, Record ID#105360, and Record ID#105361, respectively. The loan carried the following borrowing terms: a 3-year maturity, a 3-year grace period, and an interest rate of 6-month SHIBOR plus a 1.5% margin. The loan had fully disbursed by June 24, 2022. Prior to the signing of the June 2022 loan agreement, CDB told the State Bank of Pakistan that (a) future loan proceeds 'could not be used' (i.e. the proceeds from a rollover facility could only be used to bolster gross reserves and serve as 'window dressing') due to weakening of the external sector position of Pakistan, and (b) it expected the Government of Pakistan to remain in good standing with the International Monetary Fund. However, when the June 2022 loan agreement was finalized, CDB authorized the borrower to freely use the proceeds of the loan (including for external debt service and foreign reserve accumulation).

Staff comments

1. The loan's all-in interest rate (3.64%) -- at the time it was issued -- was calculated by adding 1.5% to average 6-month SHIBOR in June 2022 (2.14%). 2. The exact size of CDB, Bank of China, and ICBC’s respective financial contributions to the 15 billion RMB syndicated rollover facility in 2022 are unknown. For the time being, AidData assumes that all 3 members of the lending syndicate contributed equal amounts (RMB 5 billion).